Marketing to the Poor: Lessons from Nestl?s Strategy in the Amazon

Thursday, July 29, 2010

I came across a news alert on CSRwire a couple of weeks ago posing an interesting question: ’Is it bad to bring American candy to remote villages in the Amazon – or worse to keep it from them?’ It featured an article by sustainability journalist Marc Gunther which explored the ethical dilemmas of marketing to the poor as highlighted by the launch of Nestlé’s new marketing strategy in Brazil – a ’floating supermarket’ designed to reach isolated riverside communities in the Amazon region.

On July 1st 2010, Nestlé, the world’s largest food company, launched a 27.5-meter long barge called Nestlé Até Você a Bordo (Nestlé Takes You Onboard) – on an 18-day voyage up the Amazon River in Brazil. With 100-square meters (1,076 square feet) of supermarket space the barge was intended to ’service’ the riverside populations of 18 municipalities (also described as small cities) from the port of Belém to the city of Almeirim in the Amazon Lowlands region. The boat remained one day in each city targeting an estimated 800,000 potential new consumers. The so-called floating supermarket carried 300 well-known Nestlé brands, including Ninho (packaged milk), Maggi (soups and seasonings) and Nescafé (instant coffee) amongst other Nestlé products including chocolate, yogurt, ice cream and juices.The press release on Nestlé’s website states that this ’unprecedented business model will service the riverside communities in the Amazon and is another one of Nestlé’s projects to reach out to remote and low-income regions. The chief executive of Nestlé Brazil, Ivan Zurita, is quoted as saying:

“We are going to pick up the customer where he is. It will be a service to the population of the Amazon, who has streets and avenues in the form of rivers. It is a project aligned with our concept of Regionalization, based on the different profiles of consumers”.

In its online marketing releases Nestlé portrays an overwhelmingly positive image of the new initiative, aligning it to the door-to-door sales system of the company, which currently counts on more than 7.5 thousand resellers and 220 micro-distributors in 15 states of Brazil. It assures readers that the floating supermarket will develop another trading channel for remote communities in the North Region offering access to ’Nutrition, Health and Wellness’. There is no mention in the company’s news releases of the nutritional benefits of the products or how the company plans to manage possible adverse effects of bringing consumer products to communities which, until now, had managed to get by without those products. One can’t help but wonder if Nestlé did not foresee the negative reaction that their new bottom of the pyramid initiative would create, particularly amongst the online community.